Will your bank charge you fees?

Ed Monk, This is Money
17 November, 2006
First Direct’s decision to become the first UK bank to charge fees for current accounts has had customers scrambling to find if their bank will be next. This is Money tried to get some answers.

The issue has sparked some angry responses from This is Money readers and rival banks have been quick to confirm their ‘commitment’ to free banking. But clear guarantees that they will not follow First Direct’s lead have been hard to come by. Here’s what the banks said.

Alliance & Leicester
When asked if A&L would rule out charging fees on current accounts, a spokesman gave a confident ‘yes, we are committed to free banking’ - before adding ‘for the time being’.

Halifax
Head of products Peter Jackson boasted that ‘Halifax is committed to free banking, and we would hope that other banks and building societies share this commitment’. Further questions to Halifax revealed that the commitment was for the time being, but that the bank could not commit indefinitely.

HSBC
As the parent of First Direct, customers are understandably worried that HSBC will follow in charging fees from current account holders.
A spokesman said: ‘HSBC will always offer a free basic bank account. We have no plans to charge fees on our current account and we don’t see that changing.’

Barclays
A Barclays spokeswoman explained that fees were ‘not on the radar’. When pressed further she conceded that the bank was not able to commit to free banking for a definite period but that there were ‘no immediate plans’.

Natwest
No promises from RBS-owned Natwest. A spokeswoman said: ‘There are no current plans to do it. We can’t say what will happen in the future. So no, we can’t rule it out.’

LloydsTSB
Lloyds stuck to the ‘no plans’ mantra. However, when asked if the bank was committed to free banking, a spokesman refused to commit.
LloydsTSB said that the current Office of Fair Trading review of bank charges, which could limit the charges imposed by banks when customers go overdrawn, would influence any thinking on current account charges.
The spokesman said: ‘Our position is that there are no plans. There is currently an OFT review ongoing and the structure of the market could obviously change after that.’

The Co-Operative Bank
Credit for honesty must be given to the Co-Op. While it said there were no immediate plans, director of retail banking, John Hughes, added: ‘It would be irresponsible of us, however, if we did not maintain a close watch on what remains a fast changing market environment.’